The recent unfortunate developments at the Lagos Deep Offshore Logistics (LADOL) Free Zone , which have scared serious investors, have fueled the need for the FEDERAL GOVERNMENT to take urgent steps to reposition the free zone for the purpose of attracting investments, which is the ultimate objective of creating free zones.
Reputable investors willing to take advantage of federal government’s mouth-watering incentives at the free zones have shunned LADOL because the existing major investments at the zone have been marred by protracted court cases.
The Nigerian Port Authority (NPA) has taken bold steps to address some of these challenges but successful resolution of the disputes has remained a mirage.
The federal government offers waivers, guarantees and other incentives to attract investments and create employment opportunities at the free zones but LADOL has used highhandedness to sack these investors.
LADOL, with staff strength of less than 50, has frustrated investors willing to create thousands of employment opportunities in the zone.
NPA had recently sanction LADOL for violating the land lease agreement the company signed with the agency.
It accused LADOL of shortchanging the federal government and engaging in other acts capable of scaring foreign investors.
Last month, the Nigerian media was awash on how LADOL paid the NPA a paltry sum of $524,105 (N37.73million) as rent for 11, 2426 hectares of land in LADOL free zone and subleased the same portion to a foreign investor at a whopping sum of $45 million (N16.2billion).
Analysts have argued that LADOL’s infraction against the NPA is an economic crime, which should be investigated by the Economic and Financial Crimes Commission (EFCC)
It is strange that the authorities have kept silent on the issue.
The media reports also contained shocking revelation on how LADOL frustrated an American company, Africoat by charging exorbitant rent thereby defeating the federal government’s desire of using the free zones to attract investments.
Unfortunately, the Nigeria Export Processing Zones Authority (NEPZA), which is supposed to check these excesses, has chosen to align with LADOL.
LADOL’s questionable commitment to promoting investments in Nigeria has raised concerns over its indigenouship claim.
For many years, LADOL and its affiliates have flaunted the perception of being a Nigerian company, which stands for the Nigerian values and interests.
They have also laid claim to being “a wholly Nigeria owned company”.
But the news was also in the media that a company called LILE (LADOL Integrated Logistics Enterprise), which is a duly registered company in the British Virgin Islands owns the LADOL.
It was also gathered that the shareholding structure is substantially made up of two foreign companies namely: SABLE OFFSHORE INVESTMENTS and ALSBA Ventures Group.
Both companies are registered entities in the British Virgin Islands otherwise known as the safe haven for tax dodgers.
SABLE Offshore Investments commands a whopping 53 per cent stake in LADOL while ALSBA Ventures Group takes an impressive 31 per cent of the shares. This only leaves a share percentage of 16 per cent for the remaining shareholders, which includes key characters currently at the helm of LADOL.
But despite this revelation about its ownership, LADOL has been enriched to the brim through benefits of local content.
Federal government’s commitment to local content had initially given them an edge with investments at LADOL at an all-time high before it moved against the foreign companies in a bid to seize their assets.
How can a company, which its majority shareholders are abroad, command a strong position in any decision-making, which can be based on the local needs and the development of the local economy in Nigeria?
LADOL benefitted the most from Egina project by charging over $100million for service charges.
Why then are the two shareholding companies still established in Virgin Island?
How has the company contributed to Nigerian economy?
Despite the huge benefits it derived from the Nigerian Content, LADOL has continued to ride roughshod on investors and the government regulators without any sanction.
As LADOL continues to flout free zone regulations; as it continues to frustrate foreign investments at the free zone, as the company continues to shortchange the government, NEPZA, which ought to stamp its feet on the ground and stop these excesses, appears to have been compromised.
LADOL’s free zone is today groaning under poor utilisation because investors can’t cope with the free zone manager’s impunity and disregard to government’s regulations.
NEPZA’s negligence of its mandates has caused Nigeria to lose a huge amount of actual and potential investments
Potential investors who witnessed when the LADOL dealt with the American company obviously felt that Nigeria is not a good destination for investments.
How long can the FEDERAL GOVERNMENT watch helplessly while private entity destroys the purpose of free zones?
…Ukpor, an advocate of Nigerian Content, writes from Abuja
